Builders Risk Insurance
What is Builders Risk Insurance?
Builders risk insurance is a policy for contractors which covers material that are typically excluded from general liability policies, including equipment and tools. Many small businesses and independent contractors seek bundle packages for general liability, builder’s risk, and worker’s compensation for sufficient coverage. While this might not be the most appropriate solution for every contracting company, it’s a possibility that can be discussed with your insurance provider. If you need additional help, our team at Contractors Liability can find you the right coverage package for your business.
Builder’s risk insurance is also known as course of construction insurance.
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What Does Course of Construction Insurance Cost?
Unlike other goods and services, insurance policy rates vary due to many factors, and the cost of a builder’s risk insurance policy is no different. Insurance companies analyze many qualities of your company in order to accurately quote how much the insurance will cost your company.
The following are considered when calculating the cost of your policy:
- The age of your company.
- Your company’s reputation.
- Your company’s insurance track record.
- The type of company.
- Where your company is located.
Typical Cost For Various Projects and Locations
|Policy Type||State||Amount of Coverage||Policy Premium||Policy Term|
|Builder’s Risk||FL||$3000000||$6480||1 Year|
|Builder’s Risk||NC||$2200000||$4928||1 Year|
|Builder’s Risk||TX||$1700000||$3124||1 Year|
|Builder’s Risk||CA||$1700000||$2414||1 Year|
|Builder’s Risk||CA||$1500000||$3570||1 Year|
|Builder’s Risk||CO||$1450000||$8686||1 Year|
|Builder’s Risk||NJ||$1000000||$3460||1 Year|
|Builder’s Risk||VA||$879000||$5274||1 Year|
|Builder’s Risk||MN||$860000||$2335||6 Months|
|Builder’s Risk||CA||$650000||$1005||6 Months|
|Builder’s Risk||IL||$595000||$595000||6 Months|
|Builder’s Risk||MA||$570000||$958||1 Year|
|Builder’s Risk||MN||$490000||$1813||6 Months|
|Builder’s Risk||NJ||$400000||$2310||1 Year|
|Builder’s Risk||TX||$400000||$1272||1 Year|
|Builder’s Risk||MN||$300000||$$1,440.00||1 Year|
|Builder’s Risk||GA||$280000||$1120||1 Year|
|Builder’s Risk||CA||$720000||$3240||1 Year|
|Builder’s Risk||NC||$600000||$1104||1 Year|
|Builder’s Risk||TN||$30000||$375||1 Year|
|Builder’s Risk||RI||$300000||$1050||6 Months|
|Builder’s Risk||AL||$200000||$600||1 Year|
|Builder’s Risk||NY||$225000||$601||6 Months|
|Builder’s Risk||TN||$215000||$430||4 Months|
|Builder’s Risk||IL||$160000||$653||6 Months|
These are not the top tier, best rates available but are Standard (or average) rates. These rates are only indications. Actual premiums can only be determined by a full underwriting process. Your actual rates may be higher or lower. Product and some features may not be available in all states.
What Does Builder’s Risk Insurance Cover?
Builders risk insurance is a form of specialized coverage, which means that only certain types of construction and renovation projects are covered. The insurance covers the following:
- Installation of permanent fixtures, such as plumbing, electricity, and solar panels.
- New construction of a building or structure.
- Remodeling of interior fixtures in a home or other building.
- Restructuring, such as removing load-bearing walls, adding a new staircase, or reinforcing a building’s foundation.
Who Needs Builders Risk Insurance?
Below are some of professions which may need builder’s risk insurance, as well as some examples of what their coverage might include.
|Type of Business||What might be included in their Builder’s Risk Policy||What is not covered|
|Builders||Stolen tools, stolen equipment, stolen fixtures from a property in construction, vandalism||Loss as a direct result of criminal activities within the business, normal wear and tear of equipment, mechanical failure, acts of war, acts of nature (such as earthquake, landslide, etc.)|
|Contractors||Stolen tools, stolen equipment, stolen fixtures from a property in construction, vandalism||Loss as a direct result of criminal activities within the business, normal wear and tear of equipment, mechanical failure, acts of war, acts of nature (such as earthquake, landslide, etc.)|
|Developers||Objects and/or equipment that was present prior to starting work with a contractor, stolen fixtures from a property in construction, vandalism||Any loss that isn’t accidental, loss as a direct result of criminal activities within the business, normal wear and tear of equipment, mechanical failure, acts of war, acts of nature (such as earthquake, landslide, etc.)|
|Home or Property Owners||Any household items and/or equipment (like garages, lawn mowers, etc.) that were not present prior to starting work with a contractor, damage to property, stolen items, vandalism||Any intentional and/or criminal activity on the homeowner’s part, normal wear and tear of equipment, mechanical failure, acts of war, acts of nature (such as earthquake, landslide, etc.)|
|Retail Companies||Ensures that the property is covered during construction, as well as covering many of the things that are covered by other companies. This is especially important if you are renting or leasing in a building.||Any intentional and/or criminal activity on the homeowner’s part, normal wear and tear of equipment, mechanical failure, acts of war, acts of nature (such as earthquake, landslide, etc.)|
Why Choose Contractors Liability?
We prioritize you; we are not looking to simply find you a policy. We take every factor into consideration and work with only A-list insurance companies to provide you with the coverage that works for your company.
When you work with Contractors Insurance, you get:
- A 5-minute quote that is custom-tailored to your business
- Licensed insurance agents ready to find the best service for you
- Help whenever you need it
Do I need to have builder’s risk insurance?
While builder’s risk insurance is not usually required by law, there are many clients that will not allow you to start a project without it. Having builder’s risk insurance shows your clients that you are committed to taking care of the property while under construction, and that you can hold yourself accountable concerning any losses that might occur during construction.
Are there any requirements to purchase builder’s risk insurance?
Almost all insurance policies have a set of terms to adhere to, but with builder’s risk insurance there are certain extra requirements that must be met by the purchaser. Generally, the purchaser must have two years’ worth of experience in construction or building, the purchaser has an insurable interest in the building, the project is either just beginning or less than 30% complete, and basic information about the project is provided to the insurance agency.
How long does coverage last?
In general, there are three different types of policies that most contractors go for. These include a 1-shot 6-month policy, a 1-shot 9-month policy, and a 1-shot 1-year policy. Additionally, some insurance providers will work out a custom policy expiration date, depending on the type of project that needs to get done. The policies are in effect until one or more requirements are fulfilled: The insured no longer has any financial interest in the property, the property is accepted as complete by the purchaser, the project is abandoned with no intent of being completed, or the insured building is put to its intended use.
At Contractors Liability, we are committed to the future of your project. For more information about how we can help you with a builder’s risk policy, contact us via web or call us at 888-819-1228 for a 5-minute quote.
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